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Cheney and Kennedy offer opposing views on Social Security

Vice President Dick Cheney and Senator Edward Kennedy offered starkly different outlooks for Social Security reform Sunday, presenting divergent opinions on the state of the system and contrasting options for improving it.

Speaking on the television program "Fox News Sunday," Cheney echoed President George W. Bush's call to action in the State of the Union address delivered last week, pressing Congress for immediate action to fix Social Security.

"If we do nothing, then the system's going to go belly up," Cheney said. "It's going to go broke."

Social Security reform has become one of the most contentious issues in the second Bush term, which experts say will be focused more on domestic policy. Republicans in Congress generally support the president's plan to create personal retirement accounts, in accordance with what Bush often calls "an ownership society." Democrats support a less radical renovation to the existing system.

Cheney said personal retirement accounts were central to the administration's plan for change. "It's a better deal for the younger generation," he said, "partly because they'll own it, partly because they'll be able to earn a higher rate of return off funds put into a personal retirement account than they will off of what they would get through traditional Social Security."

He also acknowledged that while the government would borrow $758 million over the next 10 years to establish the accounts, the plan would ultimately require borrowing trillions more.

Kennedy, Democrat of Massachusetts, said on the NBC's "Meet the Press" that the existing Social Security program was in need of mending but that it did not constitute a crisis, citing figures from the Congressional Budget Office suggesting that the Social Security Trust Fund could pay at least 81 percent of projected benefits through 2053.

The vice president acknowledged the criticism. "We have people running around saying, 'Well, it's not going to be a problem for 30 years,"' Cheney said.

"If we start now, it'll be cheaper in the long run. We can phase it in over time, so it's fair and equitable to everybody who's affected by it. People have time to adjust."

Kennedy also disagreed with the administration over how to pay for the changes, suggesting instead that the president's tax cut be scaled back. "You can roll back just one-third of it and solve the Social Security problem," he said.

The vice president said many options were still being debated and that the president was open to most of them. "We talked the other night not only about the question, for example, of indexing - going from wage-indexing to price-indexing. We've talked about raising the retirement age. We've talked about other proposals that have been offered by Democrats and Republicans alike."

Kennedy said raising the age at which Social Security benefits begin was premature. "Not at this time," he said, "because I don't think we have a crisis."

The president's proposal drew criticism from other Democrats earlier this week. Senator Max Baucus of Montana, the senior Democrat on the Senate Finance Committee, said personal retirement accounts would not account for the predicted shortfall in the program's coffers. "All this talk you hear about private accounts," he said on Friday, "it really has nothing to do with the solvency of the Social Security trust fund. In fact, it makes the solvency of the Social Security trust fund much worse. Much worse."

Cheney also spoke briefly about the president's proposed budget, which the administration plans to submit to Congress on Monday. The budget is said to include increases in defense spending and cuts to farming subsidies, environmental protection and Medicaid, the state health care program for the poor.